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Is Gear4music (Holdings) plc's (LON:G4M) CEO Pay Justified?

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The CEO of Gear4music (Holdings) plc (LON:G4M) is Andrew Wass. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Gear4music (Holdings)

How Does Andrew Wass's Compensation Compare With Similar Sized Companies?

Our data indicates that Gear4music (Holdings) plc is worth UK£41m, and total annual CEO compensation is UK£200k. (This figure is for the year to February 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£195k. We looked at a group of companies with market capitalizations under UK£164m, and the median CEO total compensation was UK£251k.

So Andrew Wass receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Gear4music (Holdings), below.

AIM:G4M CEO Compensation, August 1st 2019
AIM:G4M CEO Compensation, August 1st 2019

Is Gear4music (Holdings) plc Growing?

Over the last three years Gear4music (Holdings) plc has shrunk its earnings per share by an average of 33% per year (measured with a line of best fit). Its revenue is up 33% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Gear4music (Holdings) plc Been A Good Investment?

Boasting a total shareholder return of 45% over three years, Gear4music (Holdings) plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Remuneration for Andrew Wass is close enough to the median pay for a CEO of a similar sized company .

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. So you may want to check if insiders are buying Gear4music (Holdings) shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.